Surface is a must for Microsoft, say chip makers

Cage Chao, Joseph Tsai, 9 August 2012

Commenting on recent complaints from PC brand vendors and ODMs about Microsoft's moves over its Surface tablet PC, sources from first-tier chip makers pointed out that the release of Surface is a must for Microsoft since Windows 8 is designed specifically for handheld consumer electronics devices such as tablet PCs and smartphones.

Since Microsoft needs to find out more about the differences in usage between consumer electronics products and PCs in order to successfully enter into the global smartphone and tablet PC markets, and expand its income sources, entering the market itself is the fastest method to achieve its goal, the sources noted.

The sources pointed out that after a long discussion with Microsoft's Windows 8 R&D team, they discovered that the global PC market is not the only target that Microsoft wishes to focus on for Windows 8 since the company basically has no competitor in the market.

To satisfy tablet PC and smartphone needs, Microsoft has changed the user interface and applications of Windows 8 hoping to attract consumers and drive up its performance.

Since Microsoft is already cooperating closely with several first-tier smartphone vendors, the company is not concerned about Windows 8-based smartphones, but for the tablet PC market, since Apple, Google and Amazon are gradually gaining advantages, while devices are also slowly devouring notebook demand and starting to impact Microsoft's income from Windows licensing for notebooks, Microsoft has decided to enter the market itself in order to create the best Windows 8 usage experience with full control over hardware, software and firmware.

Although Microsoft will maintain its cooperation with Taiwan-based PC brand vendors and ODMs to expand Windows 8's market share, the sources believe that in the tablet PC market, Taiwan-based PC players' future fate will be picking up the leftovers from first-tier players, and the relationship between Microsoft and Taiwan PC players may become less integrated.

However, the sources are also pessimistic about Microsoft's move in pushing its own tablet PC since most similar cases in the past ended with failure due to fierce competition.